August WTI crude oil (CLQ25) today is down -0.48 (-0.72%), and August RBOB gasoline (RBQ25) is up +0.0152 (+0.70%).
Crude oil prices continued to show weakness today after President Trump on Monday refrained from imposing new sanctions on Russian oil exports. Mr. Trump only threatened tariffs in the future on countries that buy Russian oil, such as China and India, if Russia does not agree to a ceasefire in its war against Ukraine. Oil prices were also undercut by today’s rally in the dollar index.
In a supportive factor for oil prices, Bloomberg reported last Thursday that OPEC+ is discussing a pause in further production increases from October, following its next monthly hike in September of 548,000 barrels. OPEC+ may be concerned about a slowdown in global oil demand in the second half of this year that could lead to a supply glut if the group keeps boosting production. The International Energy Agency said inventories have been accumulating at a rate of 1 million bpd and that global crude oil market faces a surplus by Q4-2025 equivalent to 1.5% of global crude consumption.
Concern about a global oil glut is negative for crude prices. On July 5, OPEC+ agreed to raise its crude production by 548,000 barrels per day (bpd) beginning August 1, exceeding expectations of a 411,000 bpd increase. Saudi Arabia also stated that additional similar-sized increases in crude output could follow, which is viewed as a strategy to reduce oil prices and penalize overproducing OPEC+ members, such as Kazakhstan and Iraq. OPEC+ is boosting output to reverse the 2-year-long production cut, gradually restoring a total of 2.2 million bpd of production by September 2026. On May 31, OPEC+ agreed to a 411,000 bpd increase in crude production for July, following the same 411,000 bpd hike for June. June crude production rose +360,000 bpd to a 1.5-year high of 28.10 million bpd.
A decrease in crude oil held worldwide on tankers is bullish for oil prices. Vortexa reported Monday that crude oil stored on tankers that have been stationary for at least seven days fell by -4.6% w/w to 78.03 million bbl in the week ended July 11.
